Which Chance was Lost? The Psychology of Damage Awards under the Loss of Chance Doctrine

Abstract

Abstract Behavioral decision theorists commonly think about their discipline in the binary terms given by normative and descriptive theory. Whereas normative theory is concerned with how people should behave (as given by models such as subjective expected utility or Bayes” theorem}, descriptive theory is concerned with how people actually do behave. Thanks in large part to the pioneering work of Amos Tversky and Daniel Kahneman, behavioral research has shown that people frequently and systematically violate normative theory. For example, people violate various axioms of subjective expected utility theory (Kahneman and Tversky 1979; Tversky and Kahneman 1986) and make probability judgments that deviate from Bayesian norms (Wells and Harvey 1978). Although some deviations from normative theory are properly treated as errors, others may help us reflect on the completeness of normative theory as a guide for real world decision-making.